NO, if you have not actually received the $$$. If you have received $$$ please be more explicit into how much and why you got the $$$ The Tax Court held that the cash values were not constructively received by the taxpayer where he could not reach them without surrendering the policy. The necessity of surrendering the policy constituted a substantial limitation or restriction on their receipt. Cohen v. Comm., 39 TC 1055 (1963), acq. 1964-1 CB 4.
are paid up insurance proceeds paid to the living person insured taxable
You are talking about Paid up additions. No they are not. Proceeds in cash value are not taxable as long as the cash value does not exceed the amount of premiums paid.
As a general rule, life insurance proceeds from any type of policy are not taxable to the beneficiary. In addition, any loans from cash value are not taxable unless the policy lapses.
No. Life insurance benefits are not eligable for taxation unless the insured passed away without assigning a beneficiary. In this situation the benefits are paid into the deceased's estate and are subject to any back taxes or child support owed by the deceased, or the would be inheritor. Cash value is not the same as an insurance benefit and may be taxable in some situations. Group (employment) insurance has no cash value.
Life insurance death benefits are paid out tax-free as long as your premiums were paid with after-tax money. If you have a cash value life insurance policy and surrender the policy, you may be subject to a taxable gain if the total cash value exceeds the cost basis of the policy.
are paid up insurance proceeds paid to the living person insured taxable
"Insurance and Taxes. No. All proceeds or withdrawals from any insurance policy are not taxable." This is not true. If you cancel a life insurance policy, the growth on the cash value IS TAXABLE. If you do not surrender your policy, the money is taken as a loan and therefore not taxable, but interest that has to be paid back to the insurance company grows.
You are talking about Paid up additions. No they are not. Proceeds in cash value are not taxable as long as the cash value does not exceed the amount of premiums paid.
As a general rule, life insurance proceeds from any type of policy are not taxable to the beneficiary. In addition, any loans from cash value are not taxable unless the policy lapses.
In India, cash value of a life insurance policy at death is totally tax free u/s. l0 l0(D) of Income Tax Act, l96l.
It normally isn't a taxable event. If it needs reporting the insurance co should have sent uyou a 1099.
Life insurance death benefits are paid out tax-free as long as your premiums were paid with after-tax money. If you have a cash value life insurance policy and surrender the policy, you may be subject to a taxable gain if the total cash value exceeds the cost basis of the policy.
No. Life insurance benefits are not eligable for taxation unless the insured passed away without assigning a beneficiary. In this situation the benefits are paid into the deceased's estate and are subject to any back taxes or child support owed by the deceased, or the would be inheritor. Cash value is not the same as an insurance benefit and may be taxable in some situations. Group (employment) insurance has no cash value.
if they are death benefit proceeds no. if it is cash value proceeds then any withdrawals over the premiums paid are taxable, any loans on the cash value are not taxable. if it is a hybrid/combo life/long term care policy, then no they are not. all of this is assuming that the policy was paid with after tax dollars, not pre tax.
No. That's why the proceeds aren't taxed as income. Answer Correct...premiums are taxable. Death benefits are generally not taxed as income. Also if it is permanent life insurance policy and has some cash value built up and you take that cash out, the amount of cash less the premiums paid into the policy ("your gain") is taxable. Additional comment: Actually, if you take your cash value out as a loan, you do not have to pay taxes on "gains" as long as the life insurance is in place, hopefully until you die.
Any cash value beyond the total amount of premiums paid is most likely taxable at ordinary income tax rates. It also depends on ownership, beneficiary (e.g. a Trust) but for most of us the first answer is correct.
That depends on whether or not you wish to continue having the life insurance in force at the insured's death. If you wish to have the life insurance in force at death, then it is best to borrow some of the cash value. If you surrender the policy, then you receive all the remaining cash value (less any surrender charges), but the death benefit is no longer there. Also the cash value received MAY be taxable.